Emissions Will Probably Still Fall – 12/6/16

The president-elect’s climate policy won’t be anything like the Obama administrations, but emissions could still drop to historic lows.

In a report published by the Breakthrough Institute, pointed out that real progress on reducing carbon in the atmosphere has been driven so far by specific domestic energy, industrial and innovation policies, “not emissions targets and timetables or international agreements intended to legally constrain national emissions.”

International and even national action on climate has rarely been the driver of emission declines. The Kyoto accords which committed advanced nations to reduce emissions between 1990 and 2010 did little to reduce dependency on. And even the Obama administration’s strictest bill on emissions, which was blocked in the Senate in 2009, proposed emissions limits that were higher than what emissions have turned out to be due to the recession and the power sector’s move from coal to natural gas.

Should promoting natural gas and energy security take precedence over bringing back coal jobs, the drop in carbon emissions could come sooner than expected. Burning natural gas produces functionally half the emissions of coal per unit energy produced.

If the Clean Power Plan is dropped and the U.S. drops its commitment to the Paris accord, the nation will still be on track to reduce emissions so long as the nation’s nuclear power plants stay online, tax incentives for wind and solar energy are left alone, and the shale energy revolution continues, according the report’s authors, Ms. Lovering and Mr. Nordhaus. Meeting those conditions, they write, “the U.S. might outperform the commitments that the Obama administration made in Paris.”

So the loss of the Clean Power Plan might not even make that much of a difference since the shift from coal to gas will likely happen regardless of what action the federal government takes. A study commissioned last December by the Environmental Defense Fund concluded that most states could comply “by relying exclusively on existing generation, investments already planned within each state and implementation of respective existing state policies.” In other words, state level initiatives were already on track to make the CPP irrelevant.

As far as support for sources of clean energy, production tax credits for renewables have already been extended by a Republican-controlled Congress until 2021 and the new administration is already indicating it favors nuclear energy.

Even the federal energy program known for its part in the Solyndra debacle is likely to survive. Given that it would take new legislation from Congress to kill the program, that the program’s loan portfolio generated about $1.65 billion in interest payments to date, and that the program is loans to clean-energy projects, as well as those including coal and natural gas, it will probably survive. Still, every new loan must be approved by the Energy Secretary so whoever takes over the Energy Department could effectively suffocate the program by not signing off on new applications.

Commercial self-interest will also keep interest in clean energy high as the costs of clean energy tumble. Solar power is closing in on gas and coal as an attractively cheap source of power, according to Bloomberg New Energy Finance.

And solar costs are expected to fall about 60% over the next eight years.

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The falling cost of solar power and the 80% drop in the cost of batteries for electric vehicles and home energy storage since 2008 are expected to curb demand for coal and oil in the coming years. Opportunities those cost declines offer will be tapped so long market forces are allowed to run their course.

On the matter of energy independence, according to the 2016 edition of the International Energy Agency’s World Energy Outlook, the United States could become energy independent as soon as 2040 on current policies thanks to rising shale oil and gas production, as well as increasing fuel efficiency. The Trump administration only has to maintain existing CAFE standards and U.S. dependence on oil from the Middle East would drop like a rock.

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